How to report fix and flip joint venture on taxes?

2 Replies

I entered a fix and flip deal with a partner 50/50. I have a LLC and he has a LLC, for this property we did not form another llc, just drew up a joint venture contract. My LLC bought the house 20k on 5/15/2017, we split purchase and rehab 50k 50/50, and sold the house on 2/1/2018 for 90k. 1. When I report this property on my balance sheet this yea 2017 do I report the full purchase price and the full rehab or just half? 2. When I report the sale of the property in 2018 since we don’t have a joint llc how do I report only 1/2 of the income came to me and 1/2 went to him? Just thought about this as I’m finalizing my 1065. Thank you for the help and insight!

@Wilson Jing

When you say "Just thought about this as I'm finalizing my 1065" are you referring to 1065 for a joint venture? or your LLC?If you LLC is SMLLC, you dont file 1065.

Usually, JV is treated as a partnership for tax purpose.

Looks like your joint venture is classified as a partnership. I am guessing you LLC is Single member LLC so disregarded for tax purpose.

Thus, the JV partnership would file a tax return (1065) and joint venture would give you both (not to your LLC because it is disregarded ) K-1s with your respective share of income that will be used to file your individual tax return.

Your JV will report an asset.

@Wilson Jing, 

Based on your questions I recommend that you have a professional prepare your tax return this year. Good luck and let me know if I can be of assistance.

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